The unraveling at the parent company stood in marked contrast with the booming business of its U.S. division, which expects this year to be its 11th straight of record sales.
Indeed, North America remained the pillar buttressing an otherwise ugly balance sheet.
"We have had very tough results for the year," CEO Tomomi Nakamura said last week while announcing the fiscal-year financial results. "In our key U.S. market, sales are, thankfully, trending very well.
"In that sense, keeping strong performance in our key market is a great source of strength."
Subaru remains on a roll in the U.S., where it expects another boost this year from the introduction of the redesigned Outback, the brand's best-selling nameplate. U.S. retail sales climbed 7.7 percent in April, for a remarkable 89th-straight month of sales gains.
Regional operating profit in North America declined 3.6 percent in the latest fiscal year, but that was modest compared with the 61 percent tumble seen in Japan's operating income.
Yet even as U.S. retail sales increased, North American operating profit was dented partly by a decline in regional wholesale volume. North American wholesale shipments dipped 1.5 percent to 717,000 vehicles in the 12 months. The parent company earnings on wholesale deliveries declined as Subaru worked to cut dealer inventory levels.
At the global level, Subaru's results also were undercut by a rash of quality problems — mostly in Japan — that forced costly recalls and caused production interruption. In January, Subaru lost almost 10 days of production as it halted output at its sole assembly plant in Japan. Lines were stopped to address a problem with electric power-steering units in the Forester and Crosstrek crossovers as well as the Impreza small car. That shutdown affected all models made in Japan, and Subaru suffered some 30,000 units of lost output.
Last fall, Subaru of America issued a recall and stop-sale for all U.S. 2018 Outback crossovers and Legacy sedans — 228,648 vehicles — because of a software programming error that could cause the low-fuel warning light to fail to illuminate.
Just before that came a global recall of some 411,000 vehicles to fix faulty valve springs that could cause engines to stall. And that came on the heels of a recall of a half-million vehicles in Japan to address the discovery of cheating on final vehicle inspections.
In Subaru's July-September fiscal second quarter, the carmaker booked its first quarterly loss since early 2010, when it was still digging out of the global financial crisis.
In the January-March fiscal fourth quarter, operating profit dropped 43 percent.
Subaru has slowed production in Japan to root out its manufacturing quality problems.
That, in turn, has crimped supply, further pressuring earnings, Nakamura said.
"The bottleneck is in the final inspection process," he said. "We are shifting the priority from production-first to quality-first at all levels so that we will never repeat this problem."
Rising incentives also have dented Subaru's profits.
In the January-March period, average spiff spending by Subaru of America rose 14 percent, while overall industry outlays decreased 4.6 percent, according to figures from Autodata Corp. But Subaru's $1,424 cost per vehicle was still far below the industry average of $3,574.
Subaru forecast that operating profit will increase to $2.35 billion in the current fiscal year ending March 31, 2020, while net will advance to $1.89 billion.
Subaru said global wholesale volume should increase 5.6 percent to 1.1 million vehicles. North American sales, it predicted, will rebound 5.1 percent to 753,000 in the current fiscal year.
Naoto Okamura contributed to this report.